Arundel Partners wants to buy a portfolio of movie sequel rights in advance because it allows them to negotiate terms upfront and leverage the portfolio to obtain better deals than negotiating film-by-film. They believe making money is possible by obtaining sequel rights at a discount and profiting from successful films. Valuing the portfolio requires data on past film revenues from exhibits 6-9 to estimate per-film values. Advantages are leveraging the portfolio for deals, while disadvantages include uncertainty in estimates without actual data on included films. Key issues in partnering with a studio could be control and profit-sharing, so Arundel should insist on terms that protect their investment and provide adequate return.
Promises Are The Uniquely Human Way of Ordering The Future, Making It Predictable and Reliable To The Extent That This Is Humanly Possible. Hannah Arendt
(Up To 4 Marks For Advantages and Disadvantages of Leasing) (Up To 4 Marks For Advantages and Disadvantages of Debentures) (Up To 4 Marks For A Comparison and A Recommendation)
Arundel Partners wants to buy a portfolio of movie sequel rights in advance because it allows them to negotiate terms upfront and leverage the portfolio to obtain better deals than negotiating film-by-film. They believe making money is possible by obtaining sequel rights at a discount and profiting from successful films. Valuing the portfolio requires data on past film revenues from exhibits 6-9 to estimate per-film values. Advantages are leveraging the portfolio for deals, while disadvantages include uncertainty in estimates without actual data on included films. Key issues in partnering with a studio could be control and profit-sharing, so Arundel should insist on terms that protect their investment and provide adequate return.
Arundel Partners wants to buy a portfolio of movie sequel rights in advance because it allows them to negotiate terms upfront and leverage the portfolio to obtain better deals than negotiating film-by-film. They believe making money is possible by obtaining sequel rights at a discount and profiting from successful films. Valuing the portfolio requires data on past film revenues from exhibits 6-9 to estimate per-film values. Advantages are leveraging the portfolio for deals, while disadvantages include uncertainty in estimates without actual data on included films. Key issues in partnering with a studio could be control and profit-sharing, so Arundel should insist on terms that protect their investment and provide adequate return.
Arundel Partners wants to buy a portfolio of movie sequel rights in advance because it allows them to negotiate terms upfront and leverage the portfolio to obtain better deals than negotiating film-by-film. They believe making money is possible by obtaining sequel rights at a discount and profiting from successful films. Valuing the portfolio requires data on past film revenues from exhibits 6-9 to estimate per-film values. Advantages are leveraging the portfolio for deals, while disadvantages include uncertainty in estimates without actual data on included films. Key issues in partnering with a studio could be control and profit-sharing, so Arundel should insist on terms that protect their investment and provide adequate return.
1. Why do the principles of Arundel Partners think they can make money buying movie sequel rights? Why do the partners what to buy a portfolio of rights in advance rather than negotiating film-by-film to buy them? 2. Estimate the per-film value of a portfolio of sequel rights such as Arundel proposes to buy. [There are several ways to approach this problem, all of which require some part of the dataset in Exhibits 6-9. 3. What are the primary advantages and disadvantages of the approach you took to valuing rights? What further assistance or data would you require to refine your estimate of the rights value? 4. What problems or disagreements would you expect Arundel and a major studio to encounter in the course of a relationship like that described in the case? What contractual terms and provisions should Arundel insist on?
Promises Are The Uniquely Human Way of Ordering The Future, Making It Predictable and Reliable To The Extent That This Is Humanly Possible. Hannah Arendt
(Up To 4 Marks For Advantages and Disadvantages of Leasing) (Up To 4 Marks For Advantages and Disadvantages of Debentures) (Up To 4 Marks For A Comparison and A Recommendation)